Chinese Central Commission for Discipline Inspection to Place Anti-Corruption Inspectors in Belt and Road Initiative Countries

On July 18, the Financial Timesreported that the Chinese Central Commission for Discipline Inspection (CCDI), the Communist Party’s mechanism for investigating corruption and misconduct by Party officials, “plans to expand its anti-corruption campaign overseas by embedding officers in countries participating in China’s Belt and Road Initiative.”

According to La Yifan, the CCDI Director-General for International Co-operation, the scale of the massive BRI, which has been projected to exceed $1 trillion, is prompting the CCDI “to expand its presence internationally to monitor the activity of Chinese companies” participating in the BRI.

The Financial Times reported that the CCDI began this approach to combating BRI-related corruption in 2017 in Laos,

to oversee a railway project being built by a state-owned company. CCDI embedded its inspectors in the project, allowing them to work alongside the company. It has also set up a joint inspection team with its Laotian counterpart.

La stated that the CCDI “plans to expand those operations by embedding inspectors in other large projects across the region.” In his words, “’We are trying to gather these practices into a standard format and copy it for other mega projects to follow suit’ . . . . So many countries have shown interest to follow suit, including the Philippines and other neighbouring countries’.”

La reportedly characterized this CCDI initiative as “an extension of China’s domestic anti-corruption campaign.” As he put it, “’How can you strike hard on corruption here at home and give a free hand to Chinese people and business groups [that are] reckless abroad’ . . . Part of the campaign is to go after corruption and stolen assets abroad’.”

La also explained that

China had launched a series of seminars with more than 30 countries to help link up anti-corruption regulators. “That is my dream, that we create a network of law enforcement of all these Belt and Road countries,” he said. “We are starting this network to exchange views on that.”

Note: La’s comment that this CCDI initiative “is an extension of China’s domestic anti-corruption campaign” is the epitome of understatement. Although China Daily recently touted the BRI as “a path to clean governance,” the BRI has been operating in numerous countries that pose substantial bribery and corruption risk and without adequate oversight. That inattention to corruption has contributed not only to arrests and convictions of former foreign officials who bribed officials in Belt and Road countries, but to a growing backlash by countries skeptical of the BRI’s purported benefits for them.

The decision to expand the international reach of the CCDI, whose authority was substantially enhanced last year, reflects a recognition by the Chinese government that it needs to pursue BRI-related corruption far more aggressively if it is to succeed in persuading other countries that its commitment to a “Clean Silk Road” is genuine.

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Published by Jonathan J. Rusch

I'm a lawyer and consultant interested in corporate- and individual-compliance issues, and an inveterate part-time law professor; a former federal prosecutor, regulator, and anti-bribery and corruption compliance head at a global financial institution; and a (very minor) shareholder in Williams Grand Prix Engineering.
View all posts by Jonathan J. Rusch